Someone asked me what’s your view on the market? my response was it will fluctuate. Some experts feel there is a breakout around the corner, some of them carefully waiting for the Fed policy this Friday. While some of them feel there will be a correction.
Global events are an integral part of market now, you cannot control these events neither can devote your full-time in predicting these events. As an investor what you can control?
- You can control how much money you put behind the idea.
- You can control which markets you trade in.
- You can control how much you are willing to risk per trade barring any gap
I love this topic as I always say we love to forecast things and we all are forecasters,
When we think about changing jobs, getting married, buying a home, making an investment, launching a product or retiring, we decide based on how we expect the future will unfold.
Whenever the markets rise sharply the probability of forecasting to end the Bull Run increases sharply and vice versa in case of Bear markets.
Why people tend to forecast market so much? Don’t they enjoy the present?
Well those are behavioural questions and difficult to answer. But definitely people enjoy forecasting things.
Will the Sensex reach 30,000 or not is the question of the moment, and there are various views on it. Continue reading
Continuing with market forecasting – The strongest predictor of rising into the ranks of superforecasters is perpetual beta, the degree to which one is committed to belief updating and self-improvement. It is roughly three times as powerful a predictor as its closest rival, intelligence.
To paraphrase Thomas Edison, superforecasting appears to be roughly 75% perspiration, 25% inspiration.
Here is a philosophic outlook, about superforecasters and they are rare breed:
CAUTIOUS: Nothing is certain
HUMBLE: Reality is infinitely complex Continue reading
You are a trader or investor ? This is the difficult question that most people do not able to answer, they take a short term view and when position goes against them, they prefer to hold the stock as long-term bet.
Most successful investors tend to have clarity of thought and look only at the larger picture. They discount all day-to-day noises and concentrate only on the fundamentals. In the end, fundamentals always prevail over speed.
here is a small description that short-term is more of an emotional based trading where as the long-term provides value for your thoughts.
Short term= Emotions
Long term= Earnings Continue reading
It’s often said that financial markets are driven by two competing emotions, greed and fear. There’s a third emotion that requires constant management: boredom.
It’s exciting when assets go up or down by a lot. Generally, they don’t. It’s boring to watch things that don’t do much in a hurry.
And it’s boring to wait for the market to validate your assessment of fundamental value. Continue reading